For the engineers and techs in the energy & sustainability sector, I am here for you.
This is your bread and butter!
And I hope to draw it for you with uncommon beauty.
What is a Chiller Plant?
So.. air conditioning takes up about 50% of energy consumption in our commercial buildings.
The cold is costly!
The energy which powers Air Conditioning simply moves machines that throw human heat outside of a building.
This sounds simple, but actually involves a long chain of machines, passing the heat to each other.
This magical process works mainly because of one principle:
Hot things transfer heat to cold things.
In a building, this happens a few times:
Your muscles and organs (37°C) heat your skin (36°C) in your body.
Your skin (36°C) heats the supply air (18°C) from your air-conditioning, making return air (28°C).
The return air (28°C) heats a chilled water supply (7°C) in the aircon unit to a chilled water return (12°C) .
The chilled water (12°C) heats a very cold refrigerant (5°C) in the chiller’s evaporator, to 6°C.
The refrigerant is compressed (6°C -> 50°C) into a high pressure vapor in the chiller’s compressor.
The hot refrigerant (50°C) heats condenser water (30°C) in the chiller’s condenser to 35°C.
The condenser water (35°C) heats the ambient air (29°C) in the cooling tower…
… which is where all our heat goes! The ambient. The sky. The outside.
Is this bad for the environment?
Technically, without air conditioning, we would walk around heating the air anyway.
What these machines do is essentially increasing the gradient between hot and cold.
That’s no problem, right?
The thing is, not all machines are efficient – they produce their own heat while working.
And the energy they consume from power plants.. requires more heat to generate too! Ideally, 100% of the electricity we supply to machines is converted into the useful work we use the machines for. However, some of this heat is inevitably converted to heat and sound produced by friction between mechanical parts and electrical resistance.
The more machinery we run to operate an air-conditioning system, the more heat is generated in the world. Sounds kinda funny, but we don’t really feel the effects of this when we’re chilling indoors!
On to the machines themselves!
1. The Air Cycle (Air Handling Units)
Humans do stuff. Their muscles and organs get warm, and this heat is transferred to their skin, which is transferred to the air around their skin.
This hot membrane of air transfers heat all over the air! Hotter air particles have more kinetic energy, and jiggle faster than their cold neighbouring particles. These hotter particles rise above their inactive neighbours who remain relatively still (AKA Meritocracy). At the ceiling of a room, a fan sucks in these hotties, blowing them past a very cold chilled water coil inside an Air Handling Unit(AHU). This coil’s water is at about 7°C. That’s cold!
The hot jiggly particles collide against this coil, losing their jiggliness to the coil surface. The cold water inside the coil takes gets heated from 7°C to 12°C. Meanwhile, the air is cooled from ~28°C to about 18°C. The resulting average room temperature is somewhere around 24°C, which is the temperature your thermostat tries to maintain.
The cycle repeats. Cold air hits human, human heats air, hot air heats water, hot air becomes cold. Ugga bugga.
2. The Water Loop
Chilled water just took some heat, and needs to drop it quickly. It flows through the Chilled Water Return pipes to the chiller plant, where it will be cooled back to 7°C again, by the chiller.
Chillers have a simple function – Make chilled water cold again.
They do this by passing the 12°C water through super-cold refrigerantfluid, which is about 5°C in the evaporator.
After the 12°C water transfers its heat to the refrigerant, it leaves the chiller at 7°C, on its merry way back to the AHUs.
3. The Refrigerant Loop
Air passed heat to water. Water passed heat to refrigerant. Refrigerants are fluids with ideal properties for containing and releasing energy rapidly, but I’ll be skipping those details for now (low boiling temperature! Rapid phase-change material!),but in summary is a fluid that can be very cold at room temperature. This enables it to be the ‘colder thing’ which the already-very-cold 12°C water can give its heat to.
Once the refrigerant takes this heat, it is compressed into a hot, high-pressure vapor, which enables it to now be the ‘hot thing’ to transfer heat to another water loop, the condensor water loop.
The whole operation of a chiller looks like this:
Which I hope makes sense of this!
4. The Condenser Water Loop – Throwing it all out
In the chiller’s condenser, hot refrigerant now passes its heat to water (Yes, a separate circuit). This water goes to a cooling tower, those huge grilled-boxes you see on top of many buildings in Singapore.
Cooling towers do exactly what you do to cool soup – blow air over it. The hot water is trickled down the serrated walls of metal, and air is sucked through these walls by a huge fan in the centre of the box’s ceiling.
The water that collects at the bottom is at about outdoor temperature, where it is pumped back to the chiller to be heated again.
This stage is called Heat Rejection, the final stage of any air conditioning cycle. It is where the heat of hundreds of warm humans is amalgamated and tossed back out into the air, where it is more easily forgotten.
Is this all necessary?
We’ve all suffered the heat here – air-con definitely makes it feel better. While I don’t have air-conditioning at home, I seem to survive quite well with fans. Even a cool breeze outdoors on a sunny day makes me feel comfortable enough to forget the humidity.
I’m not so sure what the best way is – what do you think?
Investing in yourself (kidding) (not really)(do it)
People shift their dough between asset classes all the time.
In economic recessions, safe slowmoving assets like cash and fixed deposits make more sense. In optimistic booms, you would wish that your money was in stonky stocks for higher growth.
Recognising where we are in the economic cycle can help you predict the future.
Put less magically, you’ll be able to recognise the best times to shift your money from one family of assets to another.
Like a farmer waiting for ripe spring soils before planting, it helps to know the seasons!
The economic cycle has four stages: Expansion, Slowdown, Recession, Recovery.
Many things affect this cycle! Consumer optimism, changing interest rates and government policies influence how much money people are willing to fling out there, and how much they want to keep in their pockets.
Here is how most investors rotate assets in each part of the cycle:
Right after a recession, optimism starts to rise and interest rates are decreasing. people are willing to borrow and invest. Industries like tourism, retail, automobiles and technology start to accumulate demand. ETFs are a very popular way to take advantage of the higher return rate of equities while spreading your risk exposure in these high times. When it becomes clear that governments will raise their interest rates, this is the best time to sell bonds and increase exposure to inflation-sensitive commodities and real estate.
Expansion -> Slowdown
While business continues to do well, fears of a pending crash and all-time-high interest rates (aka governments trying to encourage less spending and inflation) often result in a sector rotation within stocks to safer, blue-chip dividend growth stocks (think Pepsico, 3M, P&G). As the expansion slows, it’s a good time to collect your earnings from past optimism and growth by selling higher-risk stocks, equities and shares at their all-time-highs and accumulating cashand fixed deposits before the next recession.
It’s hard to predict when the economy is in a slowdown or still in expansion. In times of doubt and uncertainty, Gold is a popular hedge which may still be volatile but never go to zero.
Slowdown -> Recession
If you’ve allocated your assets well, this is you in a recession!
When the market crashes, business optimism takes a hit and investment sell-offs trigger massive drops across the economy.
Schoolkids remain blur, generally insulated, and quite happy.
In a recession, pretty much all asset classes decline. Whatever the cause, crashes are often sudden! Here, the art of moneyparking becomes more about losing less than seeking growth. Once it’s clear that an economy is in decline, goverments reduce interest rates to ease the drop, making bonds and fixed assets more attractive investments to buy.
Recession -> Recovery
At the very bottom of the recession, it is a great time to buy resilient stocks which you think will last through the recession and return again (just like SG Airlines in the heart of COVID last year…) As the mothers say, “This one is by the government … won’t fail.”
This is the part of the market where you “Be fearful when others are greedy. Be greedy when others are fearful.” (quote by Britney Spears)
Sentiment around the very bottom of a recession is awful – people are pessimistic, companies are doing very badly, and it can often slip one’s mind to tackle the market with an aggressive, optimistic portfolio. But that is the best time. Stocks perform best over the long term, and depending on your risk tolerance and needs, having some cash around to invest more during recessions can help you emerge with a better outcome.
Using the Economic Cycle for decisions
Knowing how money flows cyclically can help you in other choices too!
For example, if you were deciding whether to buy or rent a home, and wanted to know if real estate would be a better investment than having spare cash for stocks from renting your house, you might want to look at how the real estate market has historically reacted around big crunches like COVID!
In fact if you took the remaining, er, $2000-3000 of cash you had and grew it at a faster rate than the property market, you might end up with more value than if you bought a property!
With new eyes, you see your cash and property as two different types of investments, subject to the economic cycle in different ways.
I hope this helps you see the variety of assets out there, and how they respond to the market!
There is much more to uncover, like the different types of crypto, how to tell which part of the cycle we’re in, and more! For another time 🙂
You can let me know your feedback in the comments, I’d love to hear suggestions to make these posts more useful.